The Honours Forfeiture Committee stripped Fred Goodwin of his knighthood on January 31, 2012. Goodwin led the Royal Bank of Scotland to financial turmoil which resulted in a massive bailout. However, his firm allowed a culture where extreme executive bonuses were allowed, even amid the banks facing serious losses.

Goodwin losing his honour is possibly the greatest shame he can face in his career. He now has to face the humiliation of other ousted knights such as Anthony Blunt, who lost his knighthood in 1979 after being ousted as a Soviet Spy. Blunt died four years later and was able to escape the fate of the hangman’s noose.

Although Goodwin may not as hated as Anthony Blunt, he is clearly not on anyone’s favorite person’s list. He was the chief executive officer of the Royal Bank of Scotland and his critics should that he disgraced the company with his leadership styles. The bank was founded in 1727 and has one of the most glorious histories of any bank in England. However, after Goodwin took over, the bank eventually needed the largest bank bailout in the nation’s history. The ire over the bonuses paid to executives has created even more controversy.

Goodwin attempted to expand the size of the bank through a variety of buyouts. However, his decisions didn’t pan out as well as he had hoped. In the end, the bank’s balance sheet amounted to nearly twice that of the entire British economy.

According to affidavits from the Financial Services Authority, Goodwin conducted deals of nearly 100 billion pounds without doing his due diligence. Some of the buyouts he engaged in consisted of data that consisted of a few folders and a CD. Investors and the FSA have gleaned this to be gross negligence. The buyout of ABN Holding NV forced Royal Bank of Scotland to face the largest loss any corporation ever experienced in the history of the UK.

Since the problems Goodwin caused, the government has taken a stake of over 80% in the bank. Stephen Hester has since been appointed to replace Goodwin as the head of Royal Bank of Scotland. Hester has also faced criticism for the role he has played in the crisis. However, he has made good on a few of his promises for reform thus far, including refusing a bonus of nearly 1 million pounds that was offered to him.

Goodwin and his colleagues still have some supporters. In a recent edition from the Economist, one writer described the situation as a witch hunt. The author (who’s name was not published on the article) stated that it was appalling that Goodwin was forced to surrender his knighthood while Hester has been condemned for corruption for merely trying to his best with a tough job.

Regardless of what position one may take on the issue, it is clear that the government is working even harder than ever to create new banking regulations to fight corruption. Whether or not it was necessary to strip Goodwin of his knighthood or not is beside the point. These efforts may be an indication that the government is ready to start taking a hard crack on banking reform and limiting the power banks hold.